Pryor Cashman Partners David Rose and Matthew Young spoke with PlanAdviser about the exceptions to attorney-client privilege that can apply to fiduciaries under Employee Retirement Income Security Act (ERISA) rules.
In "When Attorney-Client Privilege Applies Under ERISA," David explains why a fiduciary getting advice from an attorney on plan-related matters is not always covered by privilege:
David Rose, a partner in Pryor Cashman LLP, explains that even though an attorney's advice may be physically delivered to a plan fiduciary, that does not mean the advice is for them. If the communications were made when the fiduciary was acting on behalf of the plan, then the advice is for the plan. In that case, the communications can be discoverable if a plaintiff alleges a fiduciary breach.
If "advice is being rendered for the benefit of the participants," says Rose, and a fiduciary disregards that advice, then it is important for the participants to be able to access those communications during litigation.
Matthew notes that the issue lies in the attorney's role in relation to the plan, rather than to the fiduciary:
Young says this can create confusion, especially with smaller sponsors, because "they think the lawyer is theirs, but [the lawyer is] the plan's." If the "advice is provided to benefit the plan, and the plan benefits the participants," then that plan is effectively the attorney's client.
Despite this potential for litigation, there is little need to reduce the candor with which a fiduciary and an attorney might communicate with each other, Young says. Rather, "parties need to be cautious about what hat they are wearing and segregate their communications."
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